A Dublin-born Irish bar and restaurant owner in New York has pleaded guilty to a misdemeanor charge of failing to pay $100,000 in wages to staffers at one of his businesses, but a plea deal with the state Attorney General’s Office has allowed him to avoid a jail sentence.
Paul Hurley, owner of numerous Irish establishments in New York and a former president of the United Restaurant and Tavern Owners’ Association, was arrested and charged in October of 2013 with three felony and seven misdemeanor counts related to defrauding 54 workers in the newest of his businesses, Desmond’s Steakhouse on Seventh Avenue and 38th Street.
Attorney General Eric Schneiderman alleged that Hurley, 49, failed to pay more than $100,000 in wages to the employees prior to the opening of Desmond’s in February of 2013. Hurley faced up to four years in prison if convicted.
"The most basic right of an employee is the right to be paid for work," Schneiderman said in a press release issued after Hurley’s arrest and arraignment. "Failure to pay legal wages is a crime and when the facts warrant it, my office will vigorously prosecute those who are guilty of breaking the law."
Hurley’s attorney, James Toner of Long Island, was able to reduce the charges to a single misdemeanor which will allow him to avoid a jail sentence, but will require the payment of restitution and other penalties.
Fernando Aquino, a spokesperson for Schneiderman, confirmed to the Irish Voice that on August 13 of this year, Hurley pleaded guilty to the reduced charge of Failure to Pay Wages in Accordance with the Labor Law.
At that time, Hurley paid $50,000 in restitution for the employees who were denied wages. He must pay the balance of $50,000 due by February 13 of next year.
The Attorney General’s Office has set October 14 as a “control date” for an update on the status of Hurley’s ability to pay the funds still owed. Aquino also said that Hurley’s plea includes additional payments to the New York State Department of Labor for unpaid unemployment insurance taxes, and periodic monitoring of the Portmarnock Restaurant Corp., his solely-controlled corporation that owns Desmond’s.
On Monday, Toner told the Irish Voice that Hurley accepts responsibility for the failure to pay workers, but added that he was unaware of the problem and a team he hired to help with the opening of Desmond’s misled him.
“Paul pled guilty to the misdemeanor to make sure the employees were paid as soon as possible,” Toner said.
“He is a very well-known businessman in New York. He was assuming the employees were paid. Is he guilty of trusting his managers in Desmond’s too much? Quite possibly.”
The attorney general’s charges against Hurley alleged that he hired workers for Desmond’s starting in October of 2012. The restaurant opened four months later with workers still not having been compensated despite the promise of imminent payment from Hurley, Schneiderman charged. In April of 2013, several workers left Desmond’s and reported the business to the attorney general.
Toner says that restitution to some of the affected employees has already been made by Hurley. He added that several civil suits against Hurley are also pending, and some of them Toner intends to vigorously challenge.
“It’s ridiculous. Some of these suits are highly inflated. The restaurant wasn’t even open and many of the wait staff were earning training wages only which have been inflated,” Toner said.
“Paul wants to make those who were genuinely affected whole. He has tremendous businesses in New York, he is a family man who lives in Westchester and loves New York City.”
Business at Desmond’s, recipient of positive reviews in outlets such as New York magazine, is now healthy Toner said, but the restaurant had numerous issues both prior to and immediately after its opening.
Hurricane Sandy delayed the debut of Desmond’s by four months, pushing the opening back to February of 2013. Not long after, Crain’s New York Business reported the departure of the restaurant’s “entire culinary staff” which was led by the noted Irish chef Conrad Gallagher, who Hurley hired to create “buzz” for his new $2 million steakhouse.
Gallagher, who began his career in New York at the Plaza Hotel and the Waldorf-Astoria, had a number of prior financial failures in Ireland, and was acquitted of stealing three paintings from a Dublin hotel. He was also declared bankrupt in South Africa after the failure of a restaurant he opened in Cape Town.
In March of 2013, one month after the opening of Desmond’s, Gallagher opened the PoshBurger Bistro in Las Vegas. It closed only four months later.
Gallagher is now based in Orange County, California, where he owns and operates Vanity Catering Events. Cooking lessons with him are available at steep discounts on Groupon.
“The [initial] team that Paul hired to run the restaurant inflated a lot of bills,” Toner charged. “But he is very sorry about what happened.”
If Hurley fails to comply with the terms of his plea, he could be sentenced to six months in jail.